Three Things to Consider Before Hiring Models for Your Marketing Campaign
By: Eric Iwasaki
When using models, many companies follow a typical procedure. After deciding what kind of models are needed for a photoshoot or event, they contact a talent agency, select the models, conduct the photoshoot/event, then pay an invoice from the talent agency a month or more after the project is complete. In many places this is perfectly acceptable, but in California, it could lead to potential liability.
Unfortunately, the relationship between a company located or doing business in California and a model’s talent agency often does not end at payment. Instead, months and sometimes more than a year after a project is complete, the company learns that the model was not paid in a timely manner and the company is liable for not only any unpaid wages owed to the model but also waiting-time penalties far exceeding the original cost of services.
This liability revelation comes to companies in the form of a demand letter claiming that the model was an employee of the company and not an independent contractor under California’s “ABC Test.” The letter also often refers to thirty-year-old case law, Zaremba v. Miller, 113 Cal. App. 3d Supp. 1 (1980), where a photographer was liable for waiting-time penalties despite already paying a talent agency under what were considered industry-standard terms.
While companies have successfully defended such claims in court, defeating them involves risks and costs that companies can altogether avoid. Specifically, companies should take these three steps to minimize liability:
- Limit Control: A primary issue in determining whether someone is an independent contractor versus an employee is the level of control by the company. Therefore, to the extent possible, the company’s control should be limited so the model has significant control over how they provide their services. In many situations in which a model’s look and performance must be tightly scripted, this can be difficult, if not impossible. But under other circumstances outside the confines of a highly-structured photoshoot, some companies use models for marketing with only limited company direction. In these situations, allowing models to perform their services using their discretion can help make clear that they are independent contractors rather than employees.
- Ensure Immediate Payment: Work with the talent agency or marketing firm and get their agreement to provide payment to the model immediately upon the completion of the event and/or as otherwise required by law (photoshoot models can be paid by the next regular payday). This is particularly important because often the biggest components are not the wages themselves, which are often paid in full by the time of the litigation or demand. Waiting-time penalties covering the period of time from when payment was required to when payment actually occurred can reflect up to 30 days’ worth of wages. When applying the rate typically paid to models, this can result in substantial monetary liability.
- Indemnity: When making an agreement with a talent agency or marketing firm, be sure to specifically include indemnity language for any expenses incurred as a result of any failure to pay wages as required by law. When dealing with smaller talent agencies or firms, their ability to pay may be limited. However, an indemnity provision can provide a company leverage in getting their assistance against any claim regardless of whether the talent agency can pay.
Although these steps will not completely protect a company from potential liability, taking them offers the best protection until changes in the law make clear that the talent agency – and not the company – should be liable if a model is paid late or not at all.
For more information on this topic, contact the author of this post. You can also subscribe to this blog to receive email alerts when new posts go up.